Correlation Between KTB Investment and Samyung Trading

Can any of the company-specific risk be diversified away by investing in both KTB Investment and Samyung Trading at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KTB Investment and Samyung Trading into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KTB Investment Securities and Samyung Trading Co, you can compare the effects of market volatilities on KTB Investment and Samyung Trading and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KTB Investment with a short position of Samyung Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of KTB Investment and Samyung Trading.

Diversification Opportunities for KTB Investment and Samyung Trading

0.02

Correlation Coefficient

KTB Investment  Samyung Trading

Significant diversification

The 3 months correlation between KTB and Samyung is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding KTB Investment Securities and Samyung Trading Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyung Trading and KTB Investment is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KTB Investment Securities are associated (or correlated) with Samyung Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyung Trading has no effect on the direction of KTB Investment i.e., KTB Investment and Samyung Trading go up and down completely randomly.

Pair Corralation between KTB Investment and Samyung Trading

Assuming the 90 days trading horizon KTB Investment Securities is expected to generate 2.63 times more return on investment than Samyung Trading. However, KTB Investment is 2.63 times more volatile than Samyung Trading Co. It trades about 0.35 of its potential returns per unit of risk. Samyung Trading Co is currently generating about 0.09 per unit of risk. If you would invest  267,000  in KTB Investment Securities on September 27, 2024 and sell it today you would earn a total of  59,500  from holding KTB Investment Securities or generate 22.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

KTB Investment Securities  vs.  Samyung Trading Co

KTB Investment Securities

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in KTB Investment Securities are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KTB Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Samyung Trading

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Samyung Trading Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Samyung Trading is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with KTB Investment and Samyung Trading

The main advantage of trading using opposite KTB Investment and Samyung Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KTB Investment position performs unexpectedly, Samyung Trading can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Samyung Trading will offset losses from the drop in Samyung Trading's long position.

The idea behind KTB Investment Securities and Samyung Trading Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.